Global healthcare solutions firm Owens & Minor Inc. (OMI:NYSE) today announced financial results for the fourth quarter and full year of 2020 ended December 31, 2020.
The company's President and CEO Edward A. Pesicka remarked, "The monumental effort of the Owens & Minor teammates in 2020 along with their relentless focus on serving our customers has reinforced our position in the healthcare industry as a trusted partner...I am very proud of how our teammates delivered on our mission of 'Empowering Our Customers to Advance Healthcare' and exemplified our IDEAL values in our swift response to the Covid-19 pandemic."
"We delivered exceptional financial results for the quarter and full year through strong execution...Our productivity gains along with favorable product mix drove our margin improvement and significant earnings growth. During the year we successfully deleveraged our balance sheet while continuing to reinvest in our businesses. We have established a solid foundation for long-term profitable growth and enhanced financial flexibility," Pesicka added.
The company reported that total revenue in Q4/20 grew by 8% year-over-year to $2.362 billion, compared to $2.191 billion in Q4/19. The firm listed that Q4/20 Global Solutions revenue grew to $1.95 billion, which represented a 1% increase over Q4/20 and a 5% increase over Q3/20. During the same period, Global Products revenue increased to $575 million, representing a 58% increase from Q4/19 and a 21% boost versus Q3/20.
Owens & Minor advised that the strong growth in Q4/20 revenue was largely driven by increased demand for personal protective equipment (PPE) through its medical distribution channel as well as through its direct to customers home healthcare business.
The company stated that net income in Q4/20 was $50.7 million, compared to a net loss of $5.4 million in Q4/19. The company reported that in Q4/20 GAAP earnings per share (EPS) was $0.72 per share and adjusted EPS was $1.14, which represented growth of nearly 400% compared to adjusted EPS of $0.23 in Q4/19.
The firm noted that the significant increase in Q4/20 year-over-year earnings was achieved by a combination of sales growth, operating efficiencies and product mix. The company stated that its gross margin expanded by 390 basis points which contributed to a 204% increase in adjusted operating income.
The company highlighted that it "delivered over 12 billion units of PPE to healthcare workers in the fight against Covid-19, of which approximately 5 billion units were produced with materials manufactured in its American factories or Owens & Minor owned facilities, since January 2020." The firm added that that it has been actively partnering with both U.S. federal and state agencies to respond to the pandemic by making further investments in PPE manufacturing capacity and distributing PPE to frontline medical personnel and is doing its part to aid in replenishing the country's strategic national stockpile.
The company offered some forward guidance and stated that for FY/21 it expects adjusted net income will be $3.00-3.50 per share, which represents growth in the range of 33-55% compared to FY/20. Owens & Minor stated that the FY/20 estimates are based upon achieving increased PPE capacity and manufacturing efficiencies during 2021. In addition, the firm projects that pass through of exam glove cost increases will add $300-$500 million to top line, but will only have a minimal impact on profitability. The firm also advised that it anticipates that the strength in the number of elective medical procedures undergone in Q4/20 will continue thru H1/21.
Owens & Minor indicated that its Board of Directors has approved a dividend for Q1/21 in the amount of $0.0025 per share, which is payable to shareholders of record as of March 15, 2021, on March 31, 2021.
Owens & Minor is a global healthcare solutions company based in Richmond, Va. The company employs about 15,000 people and markets its products and services to greater than 4,000 healthcare industry customers in around 70 countries. The firm provides a broad spectrum of integrated technologies, products, services and logistical support to healthcare providers and manufacturers across the continuum of care. At present, the company is highly focused on reliably supplying its self-manufactured surgical and PPE products and portfolio of products representing 1,200 branded suppliers to medical facilities. The company has production and distribution operations, customer service centers and sales offices located across Asia-Pacific, Europe, Latin America, and North America.
Owens & Minor started the day with a market cap of around $1.9 billion with approximately 73.51 million shares outstanding and a short interest of about 7.6%. OMI shares opened 14% higher today at $29.03 (+$3.60, +14.16%) over yesterday's $25.43 closing price and reached a new 52-week high this morning of $35.73. The stock has traded today between $28.50 and $35.73 per share and is currently trading at $34.54 (+$9.11, +35.82%).
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